■ More small startups are competing with statewide or regional exchanges for physician business, a report finds.

Physicians appear to be more interested in local, rather than state or regional, health information exchanges, believing that close-to-home networks are better equipped to meet their needs, according to a survey of exchanges in the U.S.

The 2012 Report on Health Information Exchange by the eHealth Initiative shows that for the first time since the annual survey was launched in 2004, competition among exchange organizations could mean that growth of statewide networks is limited. For physicians, this means the statewide exchanges could end up having fewer services in which they are interested. Exchanging information outside their communities may involve use of multiple information exchanges, or use of Direct, a private messaging system launched in 2010 by the Dept. of Health and Human Services Office of the National Coordinator for Health Information Technology.

Of the 161 HIEs surveyed, 39 were statewide exchanges or state-designated entities, and 28 identified themselves as health care delivery organizations. The eHealth Initiative said the actual number of local exchanges run by health care systems probably is much higher, because many do not call themselves health information exchange organizations. The remaining survey respondents were nongovernment organizations, academic institutions, technology vendors, public health departments, state government or policy/advocacy groups.

Sixty-three of those surveyed said competition from other exchanges was among their top challenges. Additionally, 68 included competition from health IT system vendors that offer health information exchange solutions on their list of top challenges.

Statewide exchanges are bound by regulations regarding how they are run and in what technology they can use because they were formed by using federal funds made available through the Healthcare Information Technology for Economic and Clinical Health Act of 2009, which many still rely on to operate. Local exchanges, which are self-funded, are not bound by these restrictions and find themselves with more to offer their stakeholders, including the physicians who use them to send and receive information.

Finding the right contacts

Local HIEs are able to get up and running much more quickly than statewide organizations. Because they are locally run, organizations with whom a practice most commonly needs to exchange data — their local hospitals, referring physicians and labs — probably are on the same network.

“They don’t have to worry that if they join the statewide HIE, that the [physicians] or specialists that they do work with may not be a part of it, which sort of negates the idea of having an exchange to begin with,” said Jason Goldwater, vice president of research and programs at eHealth Initiative.

Physicians in urban areas who may be affiliated with several hospitals or have varying health exchange needs may find themselves with several HIE options from which to choose. The number of options is growing. New models of care such as accountable care organizations and patient-centered medical homes, which rely on data exchange, are emerging. The organizations at the center of those new models of care are launching their own private HIE networks.

There may be facilities outside the local geographic region with whom physicians need to exchange data, such as statewide immunization registries, to meet meaningful use incentive requirements. Goldwater said physicians may join more than one HIE, or they may take advantage of the Direct messaging system.

Through Direct, physicians can securely send data to any other organization that also has Direct, regardless of which HIE they belong to. The survey found that more than 100 HIEs offer Direct or plan to incorporate it into their offerings.

As federal funding for statewide HIEs starts to run out, many are struggling to find sustainable revenue streams. This has hampered their ability to grow and add exchange capabilities that will meet the needs of the physicians and organizations they are trying to attract.

“If they have not developed another model, or they have not looked at a way of creating new revenue streams so they can continue to remain operational after the HITECH funding ends, then it’s going to be disadvantageous for providers to join them. Because if there’s a risk, they will not continue operating, then all of the benefits they have accrued since joining will be diminished.” Goldwater said.

The competitiveness of the HIE market probably will be a good thing for physicians, he said, because it will result in more options. Although the competition may not mean the end of the statewide exchanges, many may need to combine their efforts with those at the local level as a means of survival.